A Product Market Fit Show | Startup Podcast for Founders
00:21:09 · Rafael Broshi, Pablo Srugo
[00:21:09] S0: Yeah, exactly. I think what you said last is spot on. You want to build something where there's a budget for it right now, or you're very confident that there's going to be a budget for it in the next six to twelve months. The thing is, those kind of tech waves. If they haven't started yet, they might start tomorrow or in five years. It's still very, very close. But if it starts in three years, you're not gonna be there, you're gonna start building too early. Even if you don't run out of money by the time the wave starts. Someone that started building two years after you will have better technology and less tech debt, right? So building something for a wave that's going to come has a high reward, but it's incredibly difficult, and usually what happens is you think you're late but you're incredibly early, right? When we started I said, wow, we're late, we're incredibly late, but no, we were early. So same here, right? People think about, you know, AI for carriers, right, for insurance carriers, and you see all those McKinsey reports and seventy percent of carriers said they're using AI. Yes, they have 45,000 people, they're using AI, they might have replaced one person with the kind of efficiency. It's like a lot of carriers haven't even moved to cloud yet. [00:22:32] S2: Yeah, that's what I was gonna say. I mean, that's the one that I always go back to. Cloud's been around for a long time. People are still moving to cloud just to give you a sense of how long it takes.
00:22:32 · Pablo Srugo, Rafael Broshi
[00:22:32] S2: Yeah, that's what I was gonna say. I mean, that's the one that I always go back to. Cloud's been around for a long time. People are still moving to cloud just to give you a sense of how long it takes. [00:22:41] S0: Yeah, we just spoke to a large carrier that sends status updates of a life claim by mail, physical mail, every three weeks. It happens a lot in the US. So there's going to be a huge transformation now in AI. It's not going to take a year. It's not going to take two years. Enterprise takes time. It's going to take five, ten, fifteen years. The only difference is that unlike cloud, what I think we're going to see is that companies in commoditized industries, such as insurance or banking, where the products are pretty similar, will not have the opportunity to wait for three years and say, hey, let's wait for those things to work and then we'll start. Because companies that are not going to jump in right now are going to be so far behind because of the kind of leverage you get with AI. It's going to be incredibly hard to close. OK, so that's what I think makes this wave a bit different than others. [00:23:37] S2: It's just a faster wave. Yeah. [00:23:39] S0: Yeah. It's a faster wave where you're seeing the kind of crazy technology that you'd imagine those kind of financial services players adopt in five or ten years. They're adopting it now, OK so e-commerce players adopted it eighteen months ago. Banks, asset managers, insurance carriers, credit unions. Now's the time they're starting to implement those solutions.
00:23:39 · Rafael Broshi, Pablo Srugo
[00:23:39] S0: Yeah. It's a faster wave where you're seeing the kind of crazy technology that you'd imagine those kind of financial services players adopt in five or ten years. They're adopting it now, OK so e-commerce players adopted it eighteen months ago. Banks, asset managers, insurance carriers, credit unions. Now's the time they're starting to implement those solutions. [00:24:01] S2: We have tens of thousands of people who have followed the show. Are you one of those people? You want to be part of the group. You want to be a part of those tens of thousands of followers. So hit the follow button. Tell me more about making that pivot. Like when was it that you decided to go for this AI for customer experience? And what was it that drove you there? Because if I'm putting myself in the founder's shoes, that's probably the biggest thing is, OK, we all know AI is a wave, but I'm right now thinking about where to kind of focus in. Where do I go? How do I catch the space that's the earthquake? How do I catch the space that's going to adopt really quickly? So how did you do it?
00:24:33 · Rafael Broshi
[00:24:33] S0: Yeah, so first of all, everything looks obvious in hindsight. And we were there when it started. Nothing is obvious. And even if it's obvious, there are always risks, right? So when we decided to pivot, because we said in the insurance part, we're growing, but we're not growing fast enough. We decided to pivot. It took us months to understand what to do, even though we had that platform that helps us respond to questions of customers, real customers in a real company that does business. And even then it took us months to say what we're going to do. And just timeline wise, by the way, when is this? That was in 2023. It's like, first of all, when a wave starts, you're not sure if it's a wave or if it's just the hype cycle. NFTs. OK. Now you're going to see Twitter blowing up. You're going to see Marc Andreessen changing his profile picture and Twitter to an NFT, right? The world's going to go nuts and you're going to say, well, I don't know if that makes sense. Like I wouldn't buy the Mona Lisa as an NFT. And some people might hear this and then write emails to me of how stupid I am and how NFTs are going to change the world. Right. But it's much easier to be at this point in time with the conviction to say, I think NFTs were a fad. I could not have said that in 2021 or 2022, right? You would have been an outcast if you said it. You might not have joined, but you would have been an outcast. So when a wave starts, it's incredibly hard to understand. By the way, it's also hard right now because what's going to happen, everything in life works in cycles, right? Tech hype cycles. So now we're at a hype. What's going to happen soon is we're going to see that AI costs are through the roof. Companies aren't seeing ROI. Then a company that IPOs is going to drop by forty percent because of that. And then the hype cycle of AI will die. And obviously I do think, and everyone agrees, that it is a trend. But there's going to be a dot com time sometime in the future, right? I don't know how hard this is going to hit, but it is going to hit. So I think that's one. It's very hard to understand. But what we said is, look, do we believe AI is going to be a wave that transforms the world? Yes. If we look back thirty years in the future, will we regret not being there?
00:26:50 · Rafael Broshi
We think we're at a point of the year 1998, we're going to start with AI, ninety nine percent of companies are going to go bankrupt or blow out. There's going to be a ton of competition, but will we regret not trying to compete in this way? You said yes. OK, great. We want to go there then, going through what we suffered in the insurance space where we built something very small. We said we're not going to build something small. We're going to build something that has the potential to be huge, and it is so obvious that no one's ever going to ask us why would someone need it. It's going to be the most obvious thing in the world. What's AI going to do? AI is going to replace workforce, awesome. Where are the three areas that we think today, that was three years ago, that is going to work, OK? We didn't talk about developers and everything related to coding because we're not that deep tech and it's not us. We said, OK, that's going to be in sales, marketing, customer support sales. Well, sales is really tough and I am still not a big believer of automated SDRs. Marketing, well, interesting, but it's not really our forte. Customer support. OK, we've done customer support. The ROI is very easy to explain. It's very easy to explain to any company. Hey, you have a hundred people. We can make it so you have twenty people. Great. How much money do you save? Plus you're going to offer 24/7 service, localization, better support, better QA, blah, blah, blah. OK. Very easy. You said, OK, great. AI for customer support, and that's how it started. And since then, no one ever asked me, why would someone need it? OK. It's the exact same question. Isn't it a solved problem yet? Aren't there a ton of competition? What are you doing differently? Why would someone work with you and not with Salesforce? Like those are the kinds of questions we get.
00:28:43 · Pablo Srugo, Rafael Broshi
[00:28:43] S2: Yes, of course. And I'm curious, like at that time, 2023, I mean, this is still two years ago, three years ago. So there were, there probably weren't that many, like it was probably happening, but it's not like there were like AI customer support winners. There would have been like the 2.0, like the previous wave chatbot customer support winners. So you had that going for you, but did you find sometimes spaces appear way more crowded than they really are? And like, isn't everybody selling? And then you get into it and you talk to the customer and you're like, actually it's you and these two, like it's not thirty, right? What was actually your experience? [00:29:12] S0: Yeah. So it's pretty close to what you said when we started. We said everyone's doing it, but we haven't seen so many VC backed startups doing it because everyone thought everyone's doing it. [00:29:26] S2: Nobody's backing them.